Hedera's HBAR token has staged an 11% bounce from its December 19 local low, but technical indicators and capital flow data suggest this recovery is fragile and risks being a "dead cat bounce" within a broader downtrend. The token remains down nearly 50% over the past three months, with its price consolidating near the lower boundary of a descending channel around $0.11.
The primary concern lies in weakening capital inflows. The Chaikin Money Flow (CMF) indicator on the daily chart is trending lower and pressing against a descending trendline that has guided capital outflows for weeks. A break below this line would signal a shift from weak inflows to active outflows, aligning with the bearish price structure. This technical weakness persists despite positive fundamental developments for the Hedera network.
Two significant real-world adoption events occurred recently but failed to buoy the price. The state of Virginia launched a live environmental credit market built on Hedera, and global energy company Repsol joined the Hedera Governing Council. These events point to growing institutional and governmental use cases, yet the market has not reacted positively.
The immediate fate of HBAR appears heavily tied to Bitcoin's performance. With a 7-day correlation coefficient of 0.85, a strong upward move by Bitcoin could drag HBAR higher, potentially triggering a short squeeze. Derivatives data shows a heavy short bias, with cumulative short liquidation leverage on Bitget near $9.9 million compared to $6 million in longs. Without Bitcoin strength, this imbalance alone is insufficient for a sustained rally.
Key price levels to watch are $0.10 on the downside and $0.13-$0.14 on the upside. A loss of the $0.10 support would confirm the bearish CMF signal and likely accelerate the downtrend. For any meaningful recovery, HBAR needs Bitcoin support to push toward $0.13, which aligns with the upper portion of its recent range and could trigger short liquidations. Market indicators like marginally negative funding rates and a declining Volume On Balance suggest stabilization, not a reversal, is the current theme.
